Liebowitz (2006a)

From Copyright EVIDENCE

Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing (including video games) Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Liebowitz (2005b)
Title: Economists Examine File-Sharing and Music Sales
Author(s): Liebowitz, S. J.
Year: 2005
Citation: Liebowitz, S. J. (2005). Economists examine file-sharing and music sales.Industrial organization and the digital economy, 145-174.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Bhattacharjee, Gopal, Lertwachara, Marsden and Telang (2007), Danaher, Smith, Telang and Chen (2012), Depoorter and Walker (2013), Handke (2012b), Hennig-Thurau, Henning and Sattler (2007), Herz and Kiljański (2016), Leung (2009), Liebowitz (2018), Liu (2015), Mateus and Peha (2008), Shang, Chen and Chen (2008), Thomes (2013), Van Eijk, Poort and Rutten (2010), Waldfogel (2009), Watson, Zizzo and Fleming (2016)
About the Data
Data Description: Data includes a literature review of various recent studies and analyses examining the impact of file-sharing on record sales.
Data Type: Primary and Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: Yes
Government or policy study?: No
Time Period(s) of Collection:
  • Not stated
Funder(s):

Abstract

At the center of the file-sharing debate is the empirical issue of whether or not file-sharing decreases sales. I should note that file-sharing can have a strong negative impact on sales even when a majority of downloads do not replace a sale. I am unaware of any serious analyst who has ever claimed a 1:1 relationship between an unauthorized copy and a lost sale, whether we are talking about photocopying or whether we are examining file-sharing. There are several estimates that the number of music files exchanged on file-sharing networks is larger than the number purchased through legitimate channels. If so, file-sharing could cause a ma jor loss of sales even if only a relatively small percentage. of unauthorized downloads translated into a lost sale. Nevertheless, estimates of the number of music files downloaded in file-sharing networks vary widely. In this paper I examine the different empirical methodologies that have been chosen in attempts to shed some light on this issue. These studies generally take different approaches in terms of their data analysis. The studies consistently find that file-sharing has led to a serious decline in record sales, except for one highly publicized study that reaches very different, and in my opinion, highly implausible conclusions.

Main Results of the Study

  • The theory underlying the analysis of file-sharing has not received the attention it deserved. It has always been clear that some possible aspects of file-sharing would harm copyright owners, such as the substitution of copies for the purchase of originals.
  • What has not been understood is that the use of file-sharing to sample products is also likely to lead to harm to copyright owners. Theoretical conditions under which file-sharing might be beneficial to copyright holders seem farfetched.
  • A broad analysis of the various theoretical factors at work supports a view that file-sharing is likely to cause serious damage to the owners of copyright materials that are shared.
  • Empirical examinations need to meet a higher hurdle than normal before they might be considered to over tern the expectation that the birth of file sharing leads to the subsequent decline in CD sales.
  • The political arena is impatient in its search for an answer and for academics to reach unanimity. In any case, it seems that file-sharing hurts copyright owners and that it is responsible for most, if not all, of the recent decline in sales.


Policy Implications as Stated By Author

More empirical studies are needed to fully understand the impact of file-sharing.


Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
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Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Green-tick.png
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
Green-tick.png

Datasets

Sample size: 27
Level of aggregation: Publication
Period of material under study: Not stated